Complainant

Respondent

Anonymised Parties

An Administrator

A Nursing Home

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00023446-001

22/11/2018

The Complainant commenced employment in a Nursing Home in 2002, in an administration role. In 2014, ownership of the Nursing Home transferred to the Respondent under TUPE Regulations.

In November 2016, the Respondent moved the all patients and all staff, with the exception of the Complainant, from their existing location, to a new location some 23 km away. The Complainant remained at the former location where she carried out administration/accounting duties.

Over the following 18 months, discussions took place at various times between one of the Respondent’s directors and the Complainant, in relation to the latter moving to the new location. On 22 June 2018, the Respondent wrote to the Complainant advising that the administration function, which she carried out at the old location, would cease on 31 August 2018, at which point it would transfer to the new location.

On 10 August 2018, the Complainant informed the Respondent that she did not propose to take up the offer of employment at the new location and considered that her employment with the Respondent would cease on 31 August 2018, on the grounds of redundancy.   The Respondent replied on 17 October 2018 stating that they did not believe the Complainant’s role had been made redundant and, therefore, they would not be paying a redundancy payment.

The Complainant submitted a complaint, under the Redundancy Payments Act, 1967, to the Workplace Relations Commission on 22 November 2018.

Background:

It was submitted that the Complainant commenced employment in a Nursing Home in 2002. In 2014, the business transferred to the Respondent, pursuant to the European Communities (Protection of Employees on Transfer of Undertaking) Regulations 2003.

It was submitted, on behalf of the Complainant, that her place of work, pursuant to her contract of employment, was the location where she originally commenced work with her previous employer in 2002 (Location A). It was further submitted that the Complainant had always worked at that location and that her contract of employment did not contain a mobility clause.

According to the Complainant’s evidence, even after the Respondent took over from her original employer and transferred the nursing/patient side of the business to a new location (Location B) in 2016, the Complainant continued to work from her office at Location A, by agreement with the Respondent.

It was submitted, on behalf of the Complainant, that, on 22 June 2018, she was advised by email that, with effect from 31 August 2018, the Respondent no longer wished to have the administration and accounts functions of the business, which the Complainant was responsible for, carried out in the premises at Location A. According to the Complainant’s evidence, she was also informed, at that time, that the Respondent intended to outsource the company accountant and most of the account functions, that comprised the vast majority of the Complainant’s duties.

According to the Complainant submission, she was then offered a completely different position to the one she held for 16 years and which was now to be located at the new location (Location B). It was further stated that the Respondent previously employed two administrators - the Complainant and one other individual. The Complainant stated that the two positions were now being replaced by one, namely a receptionist role with some administrative functions. It was submitted that this was the job, which was based at Location B, that was offered to the Complainant.

The Complainant submitted that it was not possible for her to transfer to Location B in circumstances where she did not own a car and would need to buy a car in order to commute to the new location. It was further submitted that this would require the Complainant incurring all the costs associated with owning a car which she would not require other than for commuting to work.

Furthermore, Complainant submitted that the job offered to her was a completely different position to the one she held for the previous 16 years and was, in effect, a demotion. According to the Complainant’s evidence, her employment was ultimately terminated on 31 October 2018.

The Complainant further submitted that the Respondent refused to sign the RP77 form or pay a redundancy payment on the grounds that they did not accept that a redundancy situation existed.

Background:

It was submitted, on behalf of the Respondent, that, in May 2014, the Health Information and Quality Authority (HIQA) circulated a document confirming that all registered nursing homes, not conforming to HIQA environmental regulations, would not have their registrations renewed in the next round of registration. i.e. up to May 2017. As the Respondent had no other option, they decided to open a new Nursing Home at Location B.

According to the Respondent’s submission, in September 2014, the directors sought and were granted authority by HIQA to transfer the register from the Nursing Home at Location A to the new Home at Location B. Consequently, it was submitted that, on 8 September 2014, all staff (including the Complainant) received a transfer of undertaking letter confirming a change of employment from the registered name of the old business to that of the new business.

The Respondent submitted that the plan, at that stage and all along, which was known to the Complainant, was that the Nursing Home at Location A would close and all staff/patients would move to the new premises at Location B, a distance of some 23 km away.

According to the Respondent’s submission, during a conversation with the Complainant on 10 March 2016, one of the directors (Mr A) once again repeated that management wanted to move the Complainant to the same administration position at Location B as she had at a previous location. It was further submitted, by the Respondent, that it was crucial to the success of the operation at Location B that the Complainant would move into this position as, in her position as administrator, she carried out particularly important functions, not least of which were; computing staff wages, processing the “Fair Deal” monthly payment claims and dealing with all residents’ accounts.

The Respondent further stated it was pointed out to the Complainant that all these functions were critical to the continued financial viability of the business. According to the Respondent, in an effort to try and ensure the Complainant’s services, Mr A offered her a bonus of €5,000 to transfer to the new location, however, this offer was declined.

According to the Respondent’s submission, the Nursing Home at Location A closed on 16 November 2016 and fifteen residents, who were subject to a HIQA schedule, were transferred to the new premises at Location B. It was further submitted that all staff, with the exception of the Complainant, transferred to Location B. According to the Respondent’s submission, one of the staff who transferred was a close neighbour of the Complainant’s and that individual is still working in the new location.

It was submitted by the Respondent that, before the closure of Location A, all staff, including the Complainant, were issued with a letter guaranteeing the transfer of their employment rights. It was further submitted that, in early 2018, Mr A personally outlined to the Complainant the long-term potential of the administrative position at the new location. According to the Respondent’s evidence, it was further explained to the Complainant that it was the intention to expand her role into a more valued and even more rewarding role than the one she held at the previous location. However, the Respondent submitted that the Complainant rejected that offer and reverted, in early 2018, by text, detailing a job description and financial management role that she would like to have as distinct from the role that was on offer to her.

Respondent’s Arguments:

In support of their position in response to the Complainant’s claim, the Respondent made the following arguments:  

1.      In November 2016, the Respondent’s directors requested that the Complainant transfer to the new location, but she declined.

2.      All staff bar, the Complainant, transferred and are working at the new location. The distance between the old location and the new location is 23 km which, by Google maps, takes some 21 minutes.

3.      Whilst the Complainant states in her submission to the WRC that she does not have a car, it is the Respondent’s understanding that this is not correct. However, it was further stated that, notwithstanding the issue of a car, the fact is that a close neighbour travels every day from Location A to Location B and it is submitted that there would be no issue with the Complainant getting a lift to work in the morning and home in the evening.

4.      It is respectfully submitted that the Complainant had no intention of ever moving to the new location. In the run-up to the closure of Location A, the Complainant presented one letter of resignation and verbally resigned three times. This alone suggests it was never the intention of the Complainant to move to the new location.

Legal Submission:

The following legal submissions were made on behalf of the Respondent:

It was submitted that a genuine redundancy is a complete defence to a claim of unfair dismissal. However, according to the Respondent, the question of redundancy does not arise in this case as it is clear that the Complainant voluntarily resigned from her employment. Therefore, having resigned her employment, the only issue that then arises is whether she is entitled to a redundancy payment. The Respondent submitted that the Complainant is not entitled to a redundancy payment.

In support of the submission in this regard, the Respondent referred to the case of Symantec Limited v Leddy and Lyons [IEHC 256], which while not exactly the same as the within case, the net issue was the same. It was submitted that in the Symantec case the employees refused to transfer under the TUPE regulations, thus resigning from their roles. It was pointed out that the High Court held that, whilst an employee is not obliged to transfer, it does not follow that a redundancy situation automatically arises.

According to the Respondent, the Complainant, in the within case, refused to transfer and, whilst that is her right, the fact is that this does not automatically give rise to a redundancy, as she has voluntarily resigned from her employment.

It is the Respondent’s submission that the Complainant’s job exists, albeit some 23 km from where she previously worked. The Respondent further submitted that there is, therefore, no question that the Complainant’s job is actually redundant. Therefore, the Respondent contends that, the only question which actually arises is whether the role in the new location constitutes suitable alternative employment.

According to the Respondent’s submission the alternative role offered in Location B is exactly the same as the Complainant held at Location A. The Respondent further submits that the only difference is the 23 km which separates the two locations. Therefore, the Respondent suggests that the net question is whether a journey of 23 km/21 minutes is unreasonable and does not constitute, as claimed by the Complainant, a suitable alternative employment. Accordingly, given the close proximity of the two locations and the Complainant’s access to a car, or at the very least public transport, the Respondent submits that the alternative role at Location B constitutes suitable alternative employment.

The Respondent made reference to Section 15 (2A) of the Redundancy Payments Acts, 1967, as amended. In particular, the Respondent drew attention to the provision that an employee whose job is no longer available and was offered alternative work by the employer may take the work for a trial period of not more than four weeks and then refused the offer. According to the Respondent’s submission, if the Complainant reasonably refuses, as they contend she has, then she is not entitled to a redundancy payment.

In conclusion, the Respondent submitted that, even if the Complainant is able to prove that the job she was offered at the new location was different to that in her previous location, the fact is she was offered “suitable alternative employment”, which she refused to take up at all or even on a trial basis.

The Respondent submits that there was little or no change in the actual job and the Complainant’s terms of conditions were preserved. Therefore, it was submitted that, even if it is determined that her job is, in fact, redundant then the fact that the Complainant unreasonably refused suitable alternative employment, disqualifies her from receiving any redundancy payment.

Section 7 (2) of the Redundancy Payment Act, 1967, states as follow:

“For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to –

(a)the fact that his employer has ceased, or intends to cease, to carry on the business for the purpose of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b)the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish.”

Having carefully considered the evidence adduced in this case, I am satisfied that, in a context where the Respondent was moving its business from the location where she had been employed for the previous 14 years, the Complainant could reasonably conclude that a redundancy situation existed.

However, notwithstanding this, the evidence also shows that the Respondent had a strong preference to retain the Complainant in their employment as they moved to their new location. In this context, the Respondent provided the Complainant with an offer of alternative employment, which she subsequently declined.

Consequently, there are, therefore, two issues to be determined in relation to the Complainant’s claim for redundancy. Firstly, it is necessary to consider the suitability of the alternative employment offered by the Respondent and secondly, to determine whether or not the Complainant’s decision to refuse the offer of alternative employment was reasonable in all the circumstances.

The law in this regard is contained in Section 15 (1) and (2) of the Redundancy Payments Act, 1967, as amended, which deal with the disentitlement to redundancy payment for refusing to accept alternative employment and states as follows:

15 - (1) “An employee shall not be entitled to a redundancy payment if

(a) his employer has offered to renew that employee's contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would not differ from the corresponding provisions of the contract in force immediately before [the termination of his contract],

(c) the renewal or re-engagement would take effect on or before the date of [the termination of his contract], and

(d) he has unreasonably refused the offer.

(2) An employee shall not be entitled to a redundancy payment if

(a) his employer has made to him in writing an offer to renew the employee's contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would differ wholly or in part from the corresponding provisions of his contract in force immediately before the termination of his contract,

(c) the offer constitutes an offer of suitable employment in relation to the employee,

(d) the renewal or re-engagement would take effect not later than four weeks after the date of the termination of his contract, and

(e) he has unreasonably refused the offer.

(2A) Where an employee who has been offered suitable employment and has carried out, for a period of not more than four weeks, the duties of that employment, refuses the offer, the temporary acceptance of that employment shall not solely constitute an unreasonable refusal for the purposes of this section”.

Having carefully considered all the evidence adduced, I am satisfied that, when the business transferred to the new location in November 2016, the Respondent’s plan was that the Complainant’s role, as it existed at that time, would also transfer in its entirety to the new location. It was clearly the Respondent’s expectation and preference that the Complainant, as a valued and long serving employee, would transfer with her work/role and her refusal to do so disappointed the Respondent.

The evidence shows that the Respondent allowed the Complainant to remain in the old premises, on her own, to carry out the administration/accounting duties she had previously carried out. It is also clear from the evidence that, during the time the Complainant worked on her own in the old location, the Respondent had numerous discussions with her in an effort to convince her to relocate to the new premises.

A point in time was reached in 2018, when the Respondent decided that, in order to streamline the business activities and consolidate them in a single premises, it was no longer feasible to maintain the administration function at the old premises, purely to facilitate the Complainant, who was still refusing to move to the new location. The evidence shows that the Respondent offered the Complainant a bonus of €5,000, which was designed to assist with the costs associated with her additional commute to the new location. The Respondent’s direct evidence in this regard was that the bonus would be payable in the event that the Complainant was willing to transfer to the new location for a period of six months on a trial basis.

The Complainant informed the Respondent that the offer of employment at the new location was not a suitable one on the basis, inter alia, that there was no mobility in her contract of employment, the additional commute was unacceptable in a context where she did not own a car and that she considered the job being offered to be completely different and, in effect, represented a demotion.

With regard to the lack of a mobility clause in her contract of employment, I note that the contract been referred to by the Complainant is dated 1 July 2009. This contract was signed five years prior to the change in the HIQA requirements for the Respondent’s business, which resulted in their inability to maintain registration at the original location. Clearly, this gave rise to a very significant and serious change of circumstances, which the Respondent, or indeed the Complainant, could not have anticipated when the contract was signed in 2009. Consequently, I am of the view that the absence of a mobility clause in the Complainant’s contract of employment does not constitute reasonable grounds for refusing to move to the new premises in 2016.

Clearly, the relocation to the new premises presented the Complainant with an additional commute to work of approximately 23/25 km. I accept that, in a context where the Complainant alleges that she did not own a car, this was not an insignificant change to her personal circumstances. However, in a context where there appears to be a reasonably good bus service on the route, where the Respondent offered a payment of €5,000 to assist with the additional costs of commuting and, more particularly, where there appears to have been the option of a lift to work with a colleague, it is questionable as to whether the additional commute could be considered as reasonable grounds for refusing to relocate.

I find this to be particularly so, given that the Complainant declined the Respondent’s offer of taking up the job on a trial basis. Had she done so, at any point between the transfer of patients and the rest of the staff in November 2016 and the final closure of the old premises in August 2018, it would have facilitated a more informed position and, in the event that significant challenges emerged, it would have strengthened the Complainant’s arguments in refusing the offer of alternative employment.

With regard to the issue of the role/position which the Complainant alleged she was being offered in 2018, I am satisfied that there was a degree of confusion and lack of clarity with regard to the exact nature of the work to be carried out by the Complainant and the office accommodation that would be made available to her.

Having carefully considered all the evidence adduced, I am of the view that a significant element of the confusion that existed emanated from the Complainant’s refusal to relocate with her work, as was originally intended by the Respondent, when all other aspects of the business moved in November 2016. The evidence suggests that in the intervening period, while the Respondent was endeavouring to gain the Complainant’s agreement to relocate, certain changes, which were necessary in order to facilitate the day-to-day running of the business at the new location, were implemented.

However, notwithstanding the above, I found the Respondent’s evidence with regard to the commitments made to the Complainant in relation to her continued role in and her value to the business to be genuine. The Respondent had clearly identified the Complainant as playing a significant role in the success and evolution of the business going forward.

In this regard, I note the Labour Court’s observation in the Cinders Limited v Celina Byrne [RPD1881] case, where the Court were impressed by the fact that the Respondent “acted at all times in a bona fide manner in her attempts to retain the Complainant in the Respondent’s employment”. I am satisfied that the Respondent’s approach, in the within case, was clearly, at all times, directed to retaining the Complainant in their employment, albeit, in a different location.

Therefore, having carefully reviewed all of the evidence adduced and taking all of the above into consideration, I find that, in all the circumstances, the Complainant’s refusal to accept the offer of working in the Respondent’s new premises was unreasonable. Consequently, I find that the Complainant’s claim for redundancy payment is not well founded.

Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I find that the Complainant’s claim for redundancy payment is not well founded and in line with Section 15, subsections (2) (c and e) and (2A) of the Redundancy Payment Act 1967, as amended, find that she is not entitled to a redundancy payment.

Redundancy Payments Act

Suitable Alternative Employment